Social enterprises are businesses that trade to tackle social problems, strengthen communities or improve the environment. They aim to generate most of their income through selling goods and services, reinvesting the majority of their profits to further their mission.
What makes a social enterprise a social enterprise?
The term ‘social enterprise’ came about from recognition that in the UK and across the world, there were organisations using the power of business to bring about social and environmental change without a single term to unite them.
Since the term started being more widely used in the mid 1990s, there has been a lot of discussion and sometimes confusion about what social enterprise is.
Social Enterprise UK defines a social enterprise as having these characteristics:
- A clear social and/or environmental mission set out in their governing documents
- Generating the majority of their income through trade (or working towards this)
- Reinvesting the majority of their profits
- Autonomous of state
- Majority controlled in the interests of the social mission
- Accountable and transparent
The History of Social Enterprise
The pioneers of social enterprise can be traced at least as far back as the 1840s, in Rochdale, where a workers’ co-operative was set up to provide high-quality affordable food in response to factory conditions that were considered to be exploitative. In the UK, a resurgence of social enterprise started in the mid 1990s with the coming together of different organisations, including co-operatives, community enterprises, enterprising charities and other forms of social business, all united by the prospect of using business to create social change.